PY compliance 'overboard'

29 July 2021
| By Jassmyn |
image
image
expand image

The amount of compliance and oversight required to push through an adviser though the professional year (PY) is overboard especially given there is no guarantee on the future of those advisers.

Speaking to Money Management, Sofcorp Wealth partner and financial adviser, Tracey Sofra said taking on a PY adviser was a massive investment for small advisory practices given the amount of time spent on training, monitoring, checking advice, and supervising.

“It’s a massive investment for businesspeople. I don’t think the industry or regulators understand and there’s no guarantees at the end because sometimes things don’t work out so how do you guarantee what’s going to happen?” she said.

“I don’t disagree with a level of supervision, mentoring, training – I totally agree.

“You’ve got to be serious about developing the up-and-coming planners within your firm but I think they’ve gone overboard.

“There’s not a lot of balance in our industry at the moment when it comes to compliance – it’s just overkill. They’ve lost the plot and gone overboard. At some point the pendulum will turn the other way and I’m guessing we’ll find balance along the way at some point.”

Sofra said advice practices that looked to take on PY advisers needed to have structure and a system in place so that it was not too taxing on the business but also benefitted the planner that was being developed.

“It always comes back to systems, methods, structure, and some sort of framework to help guide and go through that. You can’t go in there ad hoc,” Sofra said.

“But you’re going to need more hands on deck. All of this is taking away from the main planners whose value is sitting in front of clients. My value is not ticking boxes and making sure I complied. At the end of the day it [compliance] doesn’t make any money for me as I am a small business.

“So, if I’m best in advice that’s where my most value is – that’s where I should be spending 90% of my time. The up and coming developing staff, they need to get their hands dirty and get in the trenches like we did 20 to 30 years ago and that’s where their value is and they’re going to get so much out of that.”

However, Sofra noted that it was important to take on talent who were keen, had the right attitude, and intelligent to progress the business.

“If you don’t offer it to him he’ll just go and find it somewhere else and it’s beneficial to the business because the longevity of the business relies on new blood coming in as well and the older planners need a way to transition out slowly,” she said.

She also said it was important to have a pathway for the PY adviser to progress to the business such as moving to become and associate and then partner.

“It’s important to be able to show them the vision of what their future looks like. You need to put yourself in their shoes – it’s not just about myself, my business partner, and the business. It’s also about how the PY adviser fits into the business and how they feel about the whole thing.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 2 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 2 weeks ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 6 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 day 6 hours ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 4 days ago